Leasing Model 3 by Salary Sacrifice.

[MikeeUK]

May I ask if you’re a lower, higher or highest rate tax payer? I have a similar scheme at my place of work and wanted to compare costs. I’d also be interested in the mileage allowance on that price and I assume that is post April when 0% BIK is in play.

My salary sacrifice deal was as follows:

M3 AWD LR, White, 18" aero wheels, black premium interior (no FSD)
20k miles per year
2 year lease
Insurance, servicing, tyres, breakdown, car tax included (basically nothing else to pay other than electricity)

I'm a higher-rate taxpayer and my net cost is £607pm (BiK is £50pm which will drop to zero on 1st April bringing my net cost down to £557pm)

 

[JSBahia]

Your BiK looks wrong, it's currently at 16% until apr-20.

P11d on AWD: ~£50,000
BIK: 16%
Higher tax: 40%

Bik tax = 50,000 × 0.16 × 0.4 = £3,200 (£266pm)

It'll then go to:

2020: 0% (£0pm)
2021: 1% (£16pm)
2022: 2% (£32pm)

 

[MikeeUK]

Your BiK looks wrong, it's currently at 16% until apr-20.

P11d on AWD: ~£50,000
BIK: 16%
Higher tax: 40%

Bik tax = 50,000 × 0.16 × 0.4 = £3,200 (£266pm)

It'll then go to:

2020: 0% (£0pm)
2021: 1% (£16pm)
2022: 2% (£32pm)

Interesting....thanks. I wonder if the BiK showing in my lease agreement has been averaged over 24 months. I will check with them tomorrow.

 

[MikeeUK]

Your BiK looks wrong, it's currently at 16% until apr-20.

P11d on AWD: ~£50,000
BIK: 16%
Higher tax: 40%

Bik tax = 50,000 × 0.16 × 0.4 = £3,200 (£266pm)

It'll then go to:

2020: 0% (£0pm)
2021: 1% (£16pm)
2022: 2% (£32pm)

This is what my Order Details page shows (when I ordered on 20th Sept):

Higher Tax Payer Gross Cost: 961.73
Effective Net Cost To You: 607.65
National Insurance Saved: 19.23
Tax Saved: 384.69
Benefit in Kind: 49.84

Due you think the net cost figure been calculated as an average over 24 months and has already taken into account the BiK taxes?

 

[JSBahia]

This is what my Order Details page shows (when I ordered on 20th Sept):

Higher Tax Payer Gross Cost: 961.73
Effective Net Cost To You: 607.65
National Insurance Saved: 19.23
Tax Saved: 384.69
Benefit in Kind: 49.84

Due you think the net cost figure been calculated as an average over 24 months and has already taken into account the BiK taxes?

Its potentially been averaged over full term, itll be worth checking with your HR department/company providing the lease.

I've attached the order details of mine. The net cost shows the price using this year's BIK rate (16%), so £250 will be removed from the net cost in Apr-20 (then subsequently raise again in Apr-21).

Because of that, i'm not sure if I want the car to come ASAP and pay the extra £250pm for a few months or would I prefer to wait and get it closer to April - dont think in patient enough to wait much longer!

 

[MikeeUK]

Its potentially been averaged over full term, itll be worth checking with your HR department/company providing the lease.

I've attached the order details of mine. The net cost shows the price using this year's BIK rate (16%), so £250 will be removed from the net cost in Apr-20 (then subsequently raise again in Apr-21).

Because of that, i'm not sure if I want the car to come ASAP and pay the extra £250pm for a few months or would I prefer to wait and get it closer to April - dont think in patient enough to wait much longer!

Will see what my leasing company says later today. Below is my quote (LR AWD White, 20k miles, 24 months).

Delivery due next Thursday....am now wondering whether I should delay until April if that saves me £250 per month in BiK :-(

 

[JSBahia]

Will see what my leasing company says later today. Below is my quote (LR AWD White, 20k miles, 24 months).

Delivery due next Thursday....am now wondering whether I should delay until April if that saves me £250 per month in BiK :-(

Theres a few of us in my team that have ordered them. We were planning to time our orders for a march delivery (as salary sacrifice starts the month after delivery) however when the price increased in September, it worked out cheaper to order then at the lower price and pay a few months of BiK than to wait a few months to time the order but pay the higher base price over 36 months.

 

[MikeeUK]

Theres a few of us in my team that have ordered them. We were planning to time our orders for a march delivery (as salary sacrifice starts the month after delivery) however when the price increased in September, it worked out cheaper to order then at the lower price and pay a few months of BiK than to wait a few months to time the order but pay the higher base price over 36 months.

Ah hadn't thought of the price increase impact vs paying BiK so maybe the extra cost isn't as painful as I was thinking. I'm getting far too excited already to contemplate delaying the delivery!

 

[Cherub77]

Mike it looks like you are with Zenith like me, they average the BIK out over the course of the term, hence £50. The closer to April you get the car the lower the figure will be. I’m hoping for a December delivery so will pay 3/4 months at the higher rate but averaged out it’s ok.

 

[MikeeUK]

Mike it looks like you are with Zenith like me, they average the BIK out over the course of the term, hence £50. The closer to April you get the car the lower the figure will be. I’m hoping for a December delivery so will pay 3/4 months at the higher rate but averaged out it’s ok.

Yes, they just confirmed the BiK is averaged-out over the 24 month term so I will be paying the higher BiK rate until April.

 

[sareelou]

We want to do this, but definitely don't see it as a zero-cost for employer (I'd be very happy to discover a zero-cost middle-man though )

We have no company car scheme - I expect it would be easier to adopt for a company that does.

Our initial "lets do this" raised a number of questions around Employers liability, and what Accounting and Legal costs we would incur in setting up the scheme.

For example: What happens if employee leaves? Are we lumbered with the "company car"? Very happy to do a deal with the employee (i.e. employee to buy the car out of company's contract / transfer elsewhere / etc), in those circumstances ... but that involves set-up cost for legals etc. and HR/payroll cost when it actually happens ... and its only one scenario-to-be-aware of

I am an employer, small business with 19 employees and have just set up one of these schemes with FleetEvolution. It has no cost to me as an employer, and in fact provides a small saving on Er NIC. The cost for running the scheme is incorporated in slightly higher lease costs but these are more than absorbed by the tax saving for the employee. Our scheme includes full insurance and all maintenance and tyres. We also have the option to hand the car back at no cost should an employee be made redundant. If an employee leaves of their own volition they will take the car with them and continue paying privately. It's a great staff retention tool. It's a no brainer as far as I'm concerned. My employees are under no obligation to participate but I am able to offer them the chance to drive an EV at a lower cost at no cost to my business - why wouldn't I?

 

[IanB]

I am an employer, small business with 19 employees and have just set up one of these schemes with FleetEvolution. It has no cost to me as an employer, and in fact provides a small saving on Er NIC. The cost for running the scheme is incorporated in slightly higher lease costs but these are more than absorbed by the tax saving for the employee. Our scheme includes full insurance and all maintenance and tyres. We also have the option to hand the car back at no cost should an employee be made redundant. If an employee leaves of their own volition they will take the car with them and continue paying privately. It's a great staff retention tool. It's a no brainer as far as I'm concerned. My employees are under no obligation to participate but I am able to offer them the chance to drive an EV at a lower cost at no cost to my business - why wouldn't I?

Got any jobs going? LOL

I just wish my employer would go down this route, but HR thinks it is too much work.

Was it Jordan you dealt with at Fleet Evolution?

 

[sareelou]

Got any jobs going? LOL

I just wish my employer would go down this route, but HR thinks it is too much work.

Was it Jordan you dealt with at Fleet Evolution?

Yes, she was really helpful. I spoke to some other scheme providers but they weren't interested in companies with so few employees.

 

[WannabeOwner]

I am able to offer them the chance to drive an EV at a lower cost at no cost to my business - why wouldn't I?

Spot on, thanks. We have put 10 charging bays in car park (Government paid 50%), and i'm happy to pay for juice (probably would only match the saving in ER NI anyway ...) just need some Employees to buy EVs

I presume Employer can be huffy about what sorts of cars qualify? No stinking Fossil Fuels, and no tiny-battery short-range EVs either ... Outlander I'm looking at you ...

 

[Joelly]

I am an employer, small business with 19 employees and have just set up one of these schemes with FleetEvolution. It has no cost to me as an employer, and in fact provides a small saving on Er NIC. The cost for running the scheme is incorporated in slightly higher lease costs but these are more than absorbed by the tax saving for the employee. Our scheme includes full insurance and all maintenance and tyres. We also have the option to hand the car back at no cost should an employee be made redundant. If an employee leaves of their own volition they will take the car with them and continue paying privately. It's a great staff retention tool. It's a no brainer as far as I'm concerned. My employees are under no obligation to participate but I am able to offer them the chance to drive an EV at a lower cost at no cost to my business - why wouldn't I?

well done you! Over the next 3 years It’s definitely an amazing opportunity.

im not sure what the average earnings are at your company, however there are some things that are worth noting - don’t just offer tesla. If the average salary is reasonably low then other alternatives such as the e golf (at my place of work that’s coming in around £220-£250 a month all in) Is a very affordable option for a car for commuting.

It’s also worth noting that salary sacrifice is taken before student loan contribution, so any students pay less towards their student loan. A student loan debt of £30000 with earnings between £25000 and £45000 then the overall difference is minimal as you’re only paying the interest between these earnings anyway. I’d advise checking calculations on a case by case basis, but that’s how it works out for me.

 

[IanB]

I just hope my company decides to offer this in the future, as seems a really great deal for all.

 

[Joelly]

I just hope my company decides to offer this in the future, as seems a really great deal for all.

It’s worth raising it with them as they may not be aware of it. Either raise to HR, or a senior manager. It is a huge benefit for the next 3 years, after that it is a bit of an unknown as the tax break won’t last forever.

 

[RichKK]

These are my costs for a Model 3 Performance, before any extras added such as premium interior, paint, fsd etc.
15,000 miles over 3 years through Arval Ignition through my employer including insurance, recovery, servicing etc with nothing up front.
Figures based on 20% rate of tax.
Hoping to take delivery March 1st, Arval placed my order Friday of last week.

 

[Joelly]

These are my costs for a Model 3 Performance, before any extras added such as premium interior, paint, fsd etc.
15,000 miles over 3 years through Arval Ignition through my employer including insurance, recovery, servicing etc with nothing up front.
Figures based on 20% rate of tax.
Hoping to take delivery March 1st, Arval placed my order Friday of last week.

View attachment 477917

mine is more expensive. £805 for LR and £847 for P. Any chance you could run a quote on the LR? See if I can get them to match it haha.

 

[Joelly]

@RichKK is that 5000m per year, or 15000 per year? if 5000 then that may be the reason for the difference